Quick Answer
You need a minimum credit score of 580 to buy a house with an FHA loan (3.5% down) or 620+ for a conventional loan. However, to get the best mortgage rates and save tens of thousands over the life of your loan, aim for 740 or higher. The difference between a 660 and a 760 credit score on a $350,000 mortgage can be $50,000+ in total interest over 30 years.
Key Takeaways
- FHA loan minimum: 580 credit score with 3.5% down payment (500-579 requires 10% down)
- Conventional loan minimum: 620, but 740+ gets you the best rates
- VA loan: No official minimum, but most lenders require 620+
- Rate impact: A 100-point score difference can mean 0.5-1.0% higher interest rate, costing $30,000-$70,000 extra over 30 years
- Fastest improvement: You can raise your score 50-100 points in 30-60 days by paying down credit utilization and disputing errors
Table of Contents
- Minimum Credit Scores by Loan Type
- How Your Score Affects Your Mortgage Rate
- The Real Dollar Cost of a Lower Score
- First-Time Homebuyer Programs by Score Range
- How to Raise Your Score Before Applying
- 5 Credit Mistakes to Avoid Before Buying
- Which Credit Score Do Mortgage Lenders Use?
- How We Evaluated
- Frequently Asked Questions
Updated April 2026
Your credit score is the single biggest factor — beyond your income — that determines whether you can buy a house and how much it will cost you. Even a modest difference in your score can mean paying tens of thousands of dollars more (or less) in interest over the life of your mortgage.
This guide breaks down the exact credit score requirements for every major loan type in 2026, shows you exactly how much each score range costs in real dollars, and gives you a concrete plan to improve your score before applying.
Minimum Credit Scores by Loan Type
Different mortgage programs have different minimum credit score requirements. Here is the complete breakdown for 2026:
| Loan Type | Minimum Score | Down Payment | Best For | Key Requirements |
|---|---|---|---|---|
| FHA Loan | 580 (3.5% down) or 500 (10% down) | 3.5-10% | First-time buyers, lower credit scores | Mortgage insurance required for life of loan (if less than 10% down) |
| Conventional Loan | 620 | 3-20% | Good credit buyers, repeat buyers | PMI required if less than 20% down; PMI drops off at 80% LTV |
| VA Loan | No official minimum (most lenders: 620) | 0% | Military service members, veterans, eligible spouses | Must have Certificate of Eligibility; VA funding fee applies |
| USDA Loan | 640 | 0% | Rural and suburban buyers | Income limits apply; property must be in USDA-eligible area |
| Jumbo Loan | 700-720 | 10-20% | Homes above conforming loan limits ($766,550 in most areas) | Stricter DTI requirements; larger reserves needed |
Meeting the minimum score gets your application considered, but it does not guarantee approval or a good rate. Lenders also evaluate your debt-to-income ratio (ideally under 43%), employment history (2+ years stable), and savings (for down payment and reserves). The minimum score is the floor — your goal should be to get as far above it as possible before applying.
How Your Score Affects Your Mortgage Rate
Mortgage lenders use tiered pricing based on credit score ranges. Here are typical 30-year fixed mortgage rates by FICO score range in early 2026:
| FICO Score | Typical 30-Year Fixed Rate | Rate Premium vs. 760+ | Lender Perception |
|---|---|---|---|
| 760-850 | 6.50% | — | Excellent — best available rates |
| 700-759 | 6.72% | +0.22% | Very good — near-best rates |
| 680-699 | 6.90% | +0.40% | Good — competitive rates |
| 660-679 | 7.11% | +0.61% | Fair — higher rates, most lenders approve |
| 640-659 | 7.54% | +1.04% | Below average — limited options, higher rates |
| 620-639 | 8.05% | +1.55% | Minimum conventional — highest conventional rates |
| 580-619 | FHA only: ~7.25% | N/A | FHA eligible — conventional not available |
These rates are estimates based on current market data and can vary by lender, location, loan amount, and down payment size. The key insight is that each credit score tier adds a measurable premium to your rate, which compounds into significant dollars over 30 years.
The Real Dollar Cost of a Lower Score
Here is what different credit scores actually cost on a $350,000 mortgage over 30 years:
| FICO Score | Rate | Monthly Payment | Total Interest (30 years) | Extra Cost vs. 760+ |
|---|---|---|---|---|
| 760+ | 6.50% | $2,212 | $446,520 | — |
| 700-759 | 6.72% | $2,265 | $465,325 | $18,805 more |
| 680-699 | 6.90% | $2,308 | $480,810 | $34,290 more |
| 660-679 | 7.11% | $2,358 | $498,928 | $52,408 more |
| 640-659 | 7.54% | $2,461 | $535,845 | $89,325 more |
| 620-639 | 8.05% | $2,583 | $579,815 | $133,295 more |
The difference between a 760 and a 620 score on the same $350,000 mortgage is over $133,000 in additional interest — and $371 more per month. This is why it can be worth waiting 3-6 months to improve your score before applying for a mortgage. Even moving from the 660-679 range to 700+ saves more than $50,000.
First-Time Homebuyer Programs by Score Range
Several programs are designed specifically for first-time buyers or buyers with lower credit scores. Down payment assistance, reduced mortgage insurance, and below-market rates are available depending on your state and financial situation.
FHA loans remain the most accessible option for lower-score buyers. The 3.5% down payment at 580+ makes homeownership achievable with as little as $12,250 on a $350,000 home. However, FHA loans require mortgage insurance for the life of the loan (unless you put 10%+ down), which adds $150-$300/month.
Fannie Mae HomeReady and Freddie Mac Home Possible are conventional loan programs for buyers earning at or below 80% of area median income. They allow 3% down with a 620+ score and offer reduced PMI rates. These are often better than FHA for qualifying buyers because PMI cancels at 80% LTV.
State and local programs vary widely but often include down payment assistance grants ($5,000-$20,000), closing cost assistance, and below-market rates. Check your state housing finance agency website for current programs. Most require a 640+ credit score and completion of a homebuyer education course.
How to Raise Your Score Before Applying
30-day actions (highest impact): Pay down credit card balances to below 30% utilization on each card (below 10% is ideal). Request a credit limit increase on existing cards without a hard pull. Check your credit report at annualcreditreport.com and dispute any errors — wrong balances, accounts that are not yours, or incorrect late payments.
60-day actions: Become an authorized user on a family member's old credit card with a high limit and perfect payment history. Pay all bills on time — set up autopay for at least minimums. Do not close any credit cards, even unused ones (closing reduces your available credit and hurts utilization).
90-day actions: If you have no credit history, open a secured credit card and use it for a small recurring charge, paying the full balance monthly. Stop applying for any new credit — each hard inquiry drops your score 5-10 points. Continue paying down balances aggressively.
6-month plan: Combine all the above actions. Most people following this plan see a 50-100 point improvement. If you are starting from 620, reaching 720+ in 6 months is realistic with disciplined credit management. The savings of $50,000+ on your mortgage make this waiting period extremely worthwhile.
5 Credit Mistakes to Avoid Before Buying
1Opening new credit cards or loans. Each application creates a hard inquiry and a new account that lowers your average age. Do not open any new credit in the 6 months before applying for a mortgage.
2Making large purchases on credit. Buying furniture, appliances, or a car on credit increases your debt-to-income ratio and utilization. Wait until after closing.
3Closing old credit cards. This reduces your total available credit, spiking your utilization ratio. Keep old accounts open even if unused.
4Co-signing for someone else. Their loan appears on your credit report and counts against your debt-to-income ratio. Decline co-signing requests until after your mortgage closes.
5Missing any payment. A single 30-day late payment can drop your score 50-100 points. Set up autopay for every bill. If you accidentally miss one, call the creditor immediately — many will not report it if you pay within 30 days and ask for a goodwill adjustment.
Which Credit Score Do Mortgage Lenders Use?
Mortgage lenders do not use the same credit score you see on Credit Karma or most banking apps. They pull your FICO scores from all three bureaus (Experian, TransUnion, Equifax) and use the middle score. If your scores are 720, 735, and 710, the lender uses 720.
For joint applications, lenders use the lower of the two applicants' middle scores. If one spouse has a 740 and the other has a 660, the lender uses 660 — which dramatically affects the rate. In some cases, it may be better for the higher-scoring spouse to apply alone (if their income qualifies).
The specific FICO model used for mortgages is FICO Score 2, 4, or 5 (depending on the bureau) — not the FICO 8 or VantageScore 3.0 that most free monitoring tools show. Your mortgage FICO score can be 20-40 points different from what Credit Karma shows. To see your actual mortgage scores, check myfico.com or ask a lender for a pre-qualification with a soft pull.
Check Your Mortgage Readiness
Use our Mortgage Affordability Calculator to see how much house you can afford based on your income, debts, and down payment savings.
Calculate How Much House You Can AffordHow We Evaluated
Our credit score thresholds and rate estimates are based on:
- Lender guidelines (30%): Published minimum requirements from FHA, Fannie Mae, Freddie Mac, VA, and USDA loan programs
- Current rate data (30%): National average mortgage rates by credit score tier from Freddie Mac PMMS, Bankrate, and FICO Loan Savings Calculator
- Consumer research (20%): CFPB mortgage complaint data, J.D. Power Primary Mortgage Origination Study, and Zillow Home Loans survey data
- Credit improvement outcomes (20%): Experian and FICO published data on score recovery timelines and factor weightings
Frequently Asked Questions
Can I buy a house with a 580 credit score?
Yes, with an FHA loan. You will need at least 3.5% down and will pay mortgage insurance for the life of the loan. Your interest rate will be higher than someone with a 700+ score, typically adding $200-$400 per month to your payment on a median-priced home. Consider whether waiting 6-12 months to improve your score would save you money long-term.
How long does it take to raise my credit score 100 points?
With aggressive action (paying down utilization, disputing errors, becoming an authorized user), many people see a 50-100 point improvement in 30-90 days. The biggest quick wins come from reducing credit card utilization — going from 80% to under 10% can boost your score 50+ points in a single reporting cycle. Recovering from major negatives (bankruptcy, foreclosure) takes longer: 12-24 months for meaningful improvement.
Does getting pre-approved hurt my credit score?
A mortgage pre-approval involves a hard credit inquiry, which temporarily lowers your score by about 5-10 points. However, the credit bureaus treat multiple mortgage inquiries within a 14-45 day window as a single inquiry, so you can shop multiple lenders without additional impact. Pre-qualification (with a soft pull) has no impact on your score.
Should both spouses be on the mortgage application?
Not necessarily. If one spouse has a significantly lower credit score, including them on the application means the lender uses the lower score for pricing. If the higher-scoring spouse's income alone qualifies for the loan, applying solo can get you a much better rate. The lower-scoring spouse can still be on the property title without being on the mortgage.
What is the ideal credit score for a mortgage?
Aim for 740+. At this level, you qualify for the best conventional rates with virtually no rate premium. Going above 760 provides minimal additional benefit — the rate difference between 760 and 850 is negligible. If your score is between 700-739, you are still in good shape but may pay a slightly higher rate. Below 700 is where rates start climbing significantly.
Do mortgage lenders look at both FICO and VantageScore?
No. Mortgage lenders exclusively use specific FICO models (FICO 2, 4, and 5 from the three bureaus). They do not use VantageScore, which is what Credit Karma and many free monitoring services provide. Your VantageScore can differ from your mortgage FICO by 20-40 points. For the most accurate picture, check your FICO scores through myfico.com or ask a lender for a soft-pull pre-qualification.
Editorial Disclosure: WalletGrower maintains editorial independence. Our recommendations are based on thorough research and analysis. Some links on this page may earn us a commission at no cost to you, which helps support our free content. Our editorial team evaluates every product independently regardless of compensation.